Cautious Asset Investment has a total of $150,000 to manage and decides to invest it in money market fund, which yields a 2% return as well as in foreign bonds, which gives and average rate of return of 10.2%. Internal policies require PAI to diversify the asset allocation so that the minimum investment in money market fund is 40% of the total investment. Due to the risk of default of foreign countries, no more than 40% of the total investment should be allocated to foreign bonds. How much should the Cautious Asset Investment allocate in each asset so as to maximize its average return?
